47 (142) 2021
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Improving Poland’s homes builds a strong business

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The IGCC Foreign Direct Investment Report published in January 2021 shows Kingfisher plc, trading in Poland under the Castorama Polska banner, being the third-largest corporate foreign investor in Poland after telecoms operator, Orange, and steelmaker, ArcelorMittal, and in 15th place among the largest foreign employers in Poland.

Castorama Polska is the leading home improvement brand, which for over 20 years, is every day helping hundreds of thousands of Poles in creating their dream houses. But being an integral part of the Polish market is more than about capital and jobs.

Nick Lakin, Kingfisher group corporate affairs director, talks to Michael Dembinski about how the Group understands building the successful company on Polish ground.

“Poland’s homeowners are active DIYers, they want to live in their own homes and want to live in a home that they’re happy in.” According to Eurostat, 84.2% of Poles live in their own houses or flats in 2019, with only 15.8% renting – one of the highest percentages of home ownership in Europe. As the society becomes wealthier, so people want to improve the comfort of their home life. “Castorama Polska has a role to help and inspire everyone who dreams of better living conditions, regardless of a budget or skills. Our role is to empower customers, to unleash their creativity and help them face the DIY challenges they undertake.

“In Poland, Castorama has 84 stores – of which four opened during the pandemic, which together employ more than 12,500 people. Kingfisher also has a shared-services centre in Poland employing over 400 colleagues, which carries out financial shared services for parts of the group including supporting the stores in Poland. Castorama is Poland’s biggest home-improvement retailer, and its growth last year reflected the group’s new strategy as well as customers’ needs to improve their homes during lockdown, when working from home often necessitated a better place for a home office.

“Contact with the customer is especially important for building a good, lasting relationship. A local store is more than a place where you can buy paint or flooring or kitchen and bathroom fittings. You come for advice. This is our advantage over e-commerce pure-players with only a few massive warehouses in a country. Our stores are firmly anchored in their local communities; customers can come in, examine the range of products on offer at first hand and discuss their needs with someone who has specialist knowledge before choosing what they’ll buy. You can come in, look at designs, colours and get it right first time.”

The rapid rise of e-commerce has led to a massive shift in the retail sector.

“It means a change in store formats. For us, they remain as local hubs which can serve as points where customers can still come in and buy in person, while for our expanding online business, the stores also serve as e-commerce fulfilment hubs – with space given over to the needs of last-mile logistics, such as order-collection lockers for click-and-collect customers. This keeps jobs, including distribution, within the local communities that we serve.

“If you are in the middle of a home improvement project and you need other pieces to finish the job, you want them now, not the next day or in several days’ time. However, e-commerce is massively transformative, we are investing heavily in it, and we can afford to invest at scale. We have seen a 200% increase in e-commerce in Castorama Polska last year; Covid has accelerated trends that would have happened anyway, our job is to adapt to those trends effectively.”

Brexit – has anything changed?

“For Poland – not at all – we hardly export anything from the UK to Poland. And, of course, Poland remains a wonderful manufacturer for products that we buy here for our stores across France, Spain and Romania, as well as the UK. Our Polish colleagues in sourcing buy products from Poland that are sold across Europe. Because there is a zero-tariff agreement, there are no tariffs on Polish-manufactured products selling into the UK.”

Success on the Polish market in the retail sector is very much about understanding the local consumer?

“A core part of our strategy is our distinct retail banners serving different customer DIY needs. Our store formats reflect the needs and tastes of the country in which they operate. This means that the range will be slightly different across our markets, yet we do our buying together. Colours of paints, wallpaper, toilets, kitchens, may differ slightly, but the design is similar; buying at scale means we can offer a really great product, a great-price kitchen for example, but we do buying across multiple countries only where it’s relevant. There are different water pressures, different health & safety rules and building regulations across different countries.”

One general trend seen in stores across the Kingfisher group is the constant push for products that are more eco-friendly. “We’re continually striving to bring ever-more resource-saving products into our stores, whether it’s energy-efficient lightbulbs or taps and toilets that use less water.”

How does Kingfisher see Poland as a place for sourcing from?

“Poland is particularly strong in wood products and ceramics; we source an impressively broad range of products from Poland, including painting tools, garden furniture, kitchens as well. Our sourcing office in Poland employs 80 people, and I think we’ll see near-sourcing grow as a trend and I’m sure Poland will be key to doing more in that space.  We source from over 800 Polish companies, employing tens of thousands of people and there are some great Polish firms we work with such as Stelmet in garden furniture, Cersanit in sanitary ware, Ekardo for doors, Barlinek for wooden floors and decking, Lamintex for windowsills and worktops; we’re honoured to do business with many great Polish companies.”

Maintaining a good workplace atmosphere is also critical to success in retail.

“Our strong performance in Poland is down to the engagement and the pride of our colleagues, earning their trust and support. This has really come to the fore with the pandemic where the safety of our staff has been critical. Castorama’s relations with our colleagues can be best portrayed by the fact that we are the only company in the Polish retail sector with almost 60% of its employees who have been with it for five years or more, and that over 45% of employees have been with the firm for at least 10 years.”

We’ve talked about the business side of Castorama in Poland. How does it contribute in terms of good corporate citizenship?

“Home improvement is at the core of what we do – we help our customers improve the quality and the comfort of their home life, and so it’s logical that our corporate social responsibility activities are also focused on home improvement.
In Poland, we support local children’s homes and social care homes financially or through donations of our products through the Castorama Foundation. Our employees have even been known to volunteer in their spare time to work on improving rooms in these homes. The key thing is that they are close to our stores, within the communities we serve.”

How do you see Poland within the wider CEE region?

“Our current focus is on our core markets of the UK, France, Poland, Spain and Romania. Our new ‘Powered by’ Kingfisher strategy is about building significant growth in these markets. Building a business up from scratch is harder. By focusing on the markets where we already are, it is easier to develop great colleague relations, a great supplier base, and build on the scale and the strength we have but it’s only done because we can see new ways we can serve our customers better. That’s served us well for over 20 years in Poland and I’m sure it will continue to do so.”


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